Technology and Customer Service for the Utility Industry
AMR/AMI and Smart Metering
Cognyst Advisors is pleased to provide the following information as an educational resource for the AMR/AMI industry. Feel free to borrow this material; we only ask that you reference this page. The material presented is just the "tip of the iceberg." Cognyst Advisors is available to help you individualize this material for your specific needs.
AMR (Automatic Meter Reading) and AMI (Advanced Metering Infrastructure) have much in common. Both use telecommunications to send data from meters and other devices at customersí premises to a remote central location. Both have the following components:
The ultimate goal for electric utilities is to operate a Smart Grid. One requirement is having Smart Metering, both at the meters located at customer premises and at intermediate points in the utility network (grid), such as at transformers, substations, capacitor banks etc. The goal is to understand in detail how the utility is operating at any moment in time, to report outages and problems in detail and in real-time and to analyze grid performance over time.
AMR/AMI systems are usually characterized by the technology used for the "first hop" the MIU to the next point of data communications. AMR system types include:
Fixed Radio. A radio receiver or data collection unit (DCU) located on a utility pole or building near the meter receives transmissions from the MIU and re-transmits them either by radio or telephone line to the utilityís offices. The transmission range between a MIU and a DCU could be from a hundred yards to a few miles. Environmental factors affect radio propagation. Fixed radio AMR/AMI systems employ an array of DCUs to ensure that the signal from the MIU finds its way to the utilityís offices.
Mobile Radio. A meter reader with a radio transceiver passes near the MIU placed at the meter. The MIU sends a signal to the mobile transceiver. In some systems, this is in response to a "wake-up" signal from the mobile transceiver. The meter reader can be walking or driving. Some vendors refer to the data collection device carried by a person walking near the meter as "hand-held RF," and "mobile RF" when it is in a moving vehicle.
Mesh Radio. A fixed radio technology. The MIU in each meter both transmits its own meter readings and also reads and re-transmits meter readings from near-by mesh radios thereby eliminating the need for a data collector (DCU). A meter reading from one meter could be passed through many other mesh radios before it finally reached the UTU. Mesh systems find optimal paths through a distribution plant to minimize retransmissions. Mesh radio systems support two-way communications (see comments below).
Power Line Communications. A signal injector located at the electric distribution substation injects an addressing signal onto the power line, and the appropriate MIU responds. Data rates can range from several kilobits per second to less than one bit per second. The lowest rate signals can travel over 100 miles and pass through existing transformers whereas signals above 60 Hz are often filtered (removed) by the transformers.
Dial-Inbound Telephone. The MIU calls the utility to download data over a telephone line. Normal meter reading calls are always initiated from the customerís premises, and usually scheduled, with each MIU having a pre-assigned time "window." The utility computer may also send information back to the MIU (e.g., when to call next). The MIU can call in immediately upon detecting a tamper or other alarm condition. Some MIUs can be remotely activated on demand by the utility, but this requires knowing the customerís phone number and, in some cases, customer involvement.
Dial-Outbound Telephone. A MIU is plugged into a phone line in the customerís premises. The utility interrogates the MIU by accessing the phone line through equipment or software located in the telephone companyís central office without ringing the phones on that line.
Broadband Cable. Broadband technology uses fiber optic or coaxial cable to carry signals. While difficult to justify for meter reading alone, broadband systems can deliver several applications that make effective use of the bandwidth; AMR/AMI becomes just one service.
Internet. The MIU has an Internet address, and uses Internet Protocol to transmit the readings to the utilityís computer.
First Hop. The communication from the meter to the utilityís offices usually takes place in several steps (meter to MIU, MIU to data collector, etc.). AMR/AMI systems are categorized according to the communication method used on the "first hop" from the MIU to the next point of data communications. For example, a system that uses radio frequency to communicate from the MIU at the meter to a data collector on a nearby utility pole is labeled "fixed RF," even though the data collector may communicate with the control computer by telephone.
Wireless. Wireless technologies communicate using radio frequency (RF) between pairs of antennas. The communication speed and reliability depend on the shape of antennas, the power level of the signal, the frequency, the number of data channels, the coding pattern, and environmental conditions (humidity, obstacles, electromagnetic noise, etc.).
Short-range versus long-range RF. AMR/AMI systems using short-range RF collect data within a few hundred feet of the
MIU at the customerís meter. Data can be collected via a mobile collection device (either hand-held or in a moving vehicle), or by a local permanently mounted data collector.
Wireline. Wireline AMR/AMI systems are characterized by a physical link between the telemetry interface unit (MIU) and the utilityís offices. Most wireline systems use an existing network, such as the telephone system, electric power lines, or cable TV.
One-Way Versus Two-Way Communications. In one-way systems, a call or transmission is initiated at the customerís premises and received by the utility. Other systems rely on a signal in one medium to alert the MIU, and another signal in another medium to send the data from the MIU to the data collection unit. These are not fully two-way communications. Two-way systems allow the utility to send information to the customerís premises in addition to receiving information from the customerís premises over the same transmission medium. Two-way systems tend to be more complex and more expensive than one-way systems. However, they can provide additional capabilities, such as remote deactivation of a customerís service, real-time price signals, or control of customersí appliances. Telephone systems by nature use two-way communications, even though the call is initiated at one end.
Public Versus Private Networks. Some AMR/AMI systems rely on existing "public access carrier" communications networks, like the telephone system, radio data networks, cellular telephony, or paging frequencies. The owners of these networks generally charge for their use on the basis of traffic. Other AMR/AMI systems involve constructing a dedicated communications network, such as a series of radio towers.
Benefits of an AMR/AMI system include
Financial Analysis. Elements of a financial analysis of AMR/AMI include:
Intangible Benefits, even though they cannot be easily quantified, are important. They include improved customer service and confidence, and the value of consumption information to customers and the utility. In an era of privatization and increasing competition in the utility industries, these intangible benefits, and the customer loyalty they create, are increasingly important.
AMR/AMI can figure prominently in a utilityís strategy to maintain market share and grow profits in a competitive marketplace. The initial focus in a competitive industry is on commercial and industrial customers. This market segment it consumes the most resources and contributes most to the utilityís bottom line. The best way to prevent customer defection is to provide them valuable data to improve their profitability. Proactively providing them AMR/AMI data as often as they need it sets an expensive barrier to entry that a competitor must exceed to steal the customer. When gas, electricity or water is most expensive to the customer, it is usually most expensive for the utility. Thus, providing the customer with the information to reduce costs also helps the utility by reducing demand when it is most needed. Retaining the higher value customer allows the utility to retain revenue that can then be re-focused on retaining other customers. Also, as consumption data becomes a more valuable commodity in the marketplace, the utility is also better positioned to benefit from other uses of the data.
Batteries. Many radio AMR/AMI units, and some telephone units, require a battery. Most AMR/AMI units are designed to operate at low power with short bursts of data transmission. Battery life depends on transmission duration, power and frequency (e.g., once per hour), as well as environmental conditions, such as fluctuations in temperature. Changing all MIU batteries is a significant undertaking. Although MIU batteries could last 15 or more years, no AMR/AMI manufacturer nor battery manufacturer is guaranteeing battery life over the useful life of the AMR/AMI system.
Standards. The AMR/AMI marketplace is rapidly evolving. New systems, vendors and products are being introduced constantly. New business alliances between manufacturers, and more interoperability between components are also creating more choices for utilities. Unfortunately, there are few standards for AMR/AMI, due more to marketing strategies than any technological barriers. In lieu of standards, many AMR/AMI manufacturers have created inter-operability with several brands of meters. If a utility or ESP wants an AMR/AMI system that supports multiple makes of meters, it must demand interoperability in its Request for Proposals, be prepared to reject certain vendors, and be willing to negotiate with the selected vendor to avoid expensive and risky sole source supply situations.
Technological Obsolescence. Traditionally, meters have had long service lives, and utilities have required
AMR/AMI systems to have comparably long lives. However, an AMR/AMI systemís incorporation of telecommunications and information technologiesĺareas that are rapidly advancingĺraises the specter that it could become obsolete before it had generated the anticipated payback.
Financial Stability Among AMR/AMI Vendors. The recent Chapter 11 filing by CellNet Data Systems has raised customer questions about the financial stability of the remaining
AMR/AMI companies. The AMR/AMI industry is undergoing a period of rapid growth and consolidation. Experience from other industries suggests that this is likely to be a time of greater risk in the
AMR/AMI industry. However, the high premium paid for CellNetís assets also teaches a valuable lesson: companies with good products and a significant base of customers are extremely valuable, even when they are insolvent! The company emerges from CellNetís reorganization will be a stronger and better competitor; thatís good news for the
AMR/AMI industry and the companies that use AMR/AMI products.
An AMR/AMI deployment is a high-profile project that requires careful planning. The implementation plan should include: